HAS THE KOREAN BEAUTY SUPPLY INDUSTRY REACHED ITS SUMMIT?

The Korean Beauty Supply Industry is very strong; in fact, the largest beauty supply network in this country is Korean. Jenny’s Beauty Supply with 9 distribution warehoused in 9 major cities is a strong example. Sally’s Beauty Supply is the largest beauty supply chain of stores in America, with over 2,300 stores in the U.S. But collectively the Koreans have over three times that many. Most are bigger and stock a larger variety of products, including local and regional products. However, the Korean stores for the most part are located in mostly Afro American communities. The reason for this is because the main focus of sales are for commercial hair, ie… wigs, hair for weaves, braids, extensions and all forms of hair augmentations. Afro American woman are the major consumers of these items. The Koreans control the major source of import of this hair through there home land of Korea. Afro Americans are only 12% of the country’s population, but are consumers of over 33% of hair care products in America. These facts make for good business sense for the Korean Beauty Supply Stores to be located in the Afro communities. One little known interesting fact is, Koreans control 60% of the beauty supply industry in America, but they are only 3% of the population.

With the preceding in mine, this leads us to the reason for this article. When the Korean’s first came to this country in groups after the Korean War and the North Korean conflict in the late 1960s, they discovered the demographics of commercial hair and the correlation of hair and hair care products as it related to the Afro consumer, and they opened stores in the predominately Afro communities to service that demographic. At first the community was apprehensive and untrusting of the Koreans whom they felt had infiltrated there turf. Also most of the Koreans could not speak English, so communication was difficult. But because the Korean stores had what the populist wanted and needed without having to go outside of the area and at competitive prices the blending of the two cultures over time became compatible.

The first generations of Koreans over came the many barriers of doing business in a some what hostel environment dating back to the late 60’s and early 70’s. The second generation for the most part assimilated into the family business and the language barrier became less of a concern in the late 80’s and mid 90’s. But when the third generation came on the scene, many of them had other goals and ambitions that did not include the Beauty Supply Business. This was the beginning of the slow down of the Korean dominated Beauty Supply Business. Many of this generation went to Colleges and Universities and came out with skills and diplomas that related to high Tec Industries and professional careers. In fact, Asians are the second largest minority enrolled in institutes of higher learning in America.

Another factor that leads to the slow down of the Korean Beauty Supply business is OVER SATURATION years ago the Koreans were careful not to compete against each other in the same vicinity, but now they are competing within a close proximity of each other. The Korean Beauty Supply market is over saturated in the Afro community especially in large metropolitan areas.

Another factor that leads to the slow down of the business is that when the Koreans first set up shop in the Afro communities the community was over 90% black. But now many areas are less than 50% black. They have been replaces by the growing Hispanic population. Hispanics have a different and much less need for the hair care products that translates to fewer sales coming from the community. Hispanics are the largest minority in America. The disappearing Afro residence has assimilated into the mainstream population. Many Korean beauty supply stores that started years ago in a predominant black community, now find them selfs surrounded by Hispanics.

HOW TO ADDRESS THIS CONCERN; try to stock products that relate to the Hispanic market. Hire sales people of that culture. Place window displays that relate to the market. This still will not replace the business from the lost Afro customer based on the information in the last paragraph, but it will stabilize sales and lead to other opportunities that you may not be aware of yet. The Good News is, that although black consumers have moved into the general population, they still come back to the old neighborhoods to purchase their hair care needs.

35 years ago the Afro community had only a few Beauty Supply Stores scattered through out the area. Today there are locations in most every shopping area large and small within that community. However, other mainstres

m communities in the cities have changed very little in this regard. Maybe that is where the new opportunities are, and where your former customers are. This will mean stocking high end items that relate to the professional market only, (as a segregated section) as well as general market retail products.

The draw back is that rent and property costs are higher, but this can be over come due to the higher income bracket of people in these communities.

You may not agree with the suggestions here, but now you know how and why the market is in transition.